Samsung, Tesla strike chip deal

Samsung Electronics has secured a $16.5 billion deal to produce AI semiconductors for Tesla through 2033. This agreement aims to boost Samsung's foundry business, which has faced significant losses. Elon Musk confirmed the deal, which is expected to help mitigate operating losses exceeding $3.63 billion in the first half of 2025.

The contract, one of Samsung's largest foundry orders from a single client, represents 7.6% of Samsung's 2024 annual sales revenue. Samsung is expected to fulfil the order at its $37 billion chip fabrication plant in Taylor, Texas, scheduled to begin operations in the second half of 2025.

Analysts believe this deal could mark a turning point for Samsung's foundry business, enabling them to better utilise their foundry capacity. Samsung's shares in Seoul rose by 3.5% following the announcement.